Net Profit = Total Revenue – Total Expenses
Total Revenue includes all income earned from sales, services, and other sources
Total Expenses include operating costs, salaries, rent, utilities, taxes, interest, depreciation, and other business costs
Subtract all expenses from total revenue to get net profit
Net Profit can be positive if revenue is greater than expenses
Net Profit can be negative if expenses are greater than revenue
Net Profit Margin = (Net Profit / Total Revenue) x 100
Use the net profit value to measure overall business profitability